3 Things You Can Learn from My Cryptocurrency Loss

Well, I’d hate to admit it, but I have successfully been faked out. The bubble finally busted and the cryptomarket came crashing down to new lows today. I wasn’t expecting for my crpytocurrency, Litecoin, to get hit as hard as the other coins; but, LTC inevitably fell along with the others. I mustered up what ego I had left in my soul and sold my half-litecoin share. I originally purchased LTC at the $330 mark and sold it at the $240 mark. This will account for a 43% loss and a few silent moments.

In light of the situation, I finally discovered my emotions when trading. I don’t get mad or frustrated, rather, I receive a blow to my ego. It does not matter how many countless books I’ve read about day trading, stocks, futures, etc., it all comes down to how my emotions will respond. Taking a leap and following the crowd was an obvious mistake in the time that I purchased.

What I Learned

1. Emotions Control the Market

The two emotions that make money go round are fear and greed. The market only moves accordingly to how people think it should. For example if I purchased Litecoin at $1.00 and positive news erupted stating that the coin was going to be used as the primary currency for a large internet company such as Facebook, then one should expect Litecoin’s price to rise several more dollars (depending on market cap) or even hundreds. The investors within the market will take into account the stability of the coin and buy it.

The next day, Facebook releases another statement concerning the coin’s unpredictability and apologizes for confusing individuals. It will retract its original statement. Overnight, we can expect Litecoin to come souring down like a roller coaster from the moon! Just as fast as it went up (greed), people will fear that they are losing their money, and will keep selling (fear).

2. Be Patient, But Know When to Quit

This is one of the hardest aspects of trading, in my opinion. If you would have purchased Litecoin at the price of $360 and it tanked overnight to $195, would you keep your share? If you have never invested before or experienced such a loss, it would be hard to tell. In crypto-world, this downward spiral led to a whirlwind of sellers in just a quick few hours; after a few more morning hours surpassed, Litecoin spiked almost nearly to its original position that it was the night before the crash. Amazing! If I would have just held onto my shares of Litecoin for another few hours, I would not have truly lost anything and could have been back to break-even!

But alas, my fear got the best of me and I sold my shares of Litecoin at $240. In retrospect of the events, no one truly knew what was going to happen. If the coin would have crashed another $200, I would not be writing this post. It would have been titled “Thank goodness I got out early enough”! I should have conducted more research before allowing my fear to sweep over me.

3. Control Your Emotions: Buy at the Lows

One of the largest fears that I have about any market, is the fear of missing out. And this ‘fear’ is certainly not a good quality to have. When Bitcoin soured to $20k in 1 month, I knew that I had missed an amazing opportunity to earn some ‘quick cash’. I decided that the second best opportunity would be to invest in its little brother, Litecoin. Without any prior knowledge and full greediness ahead, I purchased some shares of Litecoin and waited for my money to double!

THIS WAS THE ABSOLUTE WORST MISTAKE EVER, and I knew better. With the adrenaline rush, greedy emotion, and fear of missing out, I purchased Litecoin at whatever price it was at.

“If I wait too long, it will be too late!” – Thomas Dec. 18th, 2017

“Well, I should have bought at the low point. *insert sad face* ” – Thomas Dec. 22nd, 2017

“The market has now faked me out… and the price is almost back to the original. FML.” – Thomas Dec. 22nd, 2017

This toxic emotion is exactly what costed me my $50. In my eyes, it was a $50 well spent to learn an extremely valuable lesson. Don’t feel bad for me, feel bad for the individuals who took out 2nd mortgages on their homes. Their greed was even more extreme than mine.

In essence, wait for the most opportune moment to invest in something. If I would have been patient and waited another week, I could have invested at the low point of $195 this morning. Be patient. Be patient. Be patient. Oh and I did I mention, be patient.

Conclusion

This was an extremely interesting ride and experiment. I’m not going to say that my cryptocurrency career is over. In fact, I will rebound and come back more knowledgable the second time around. As always, I caution anyone who is going to begin investing in crypto.

Good luck, and may the profits be with you!